CO129-607-2 Military administration- accounts- etc. 3-2-1949 - 14-11-1949 — Page 31

COPY

A.

54126/8/49

retypes of of enoto (1)

31

Memorandum by War Office

As it wes known that the Exchequer and Audit Depart- sent had examined Hong Kong records for the period of British Military Administration, they were consulted on para.11 of the Regert by the Director of Audit, Hong Kong about the cost of operating electricity companies. They produced fairly comprehen- sive figures for the Hong Kong Blectric Company which are set out in the statements attached. Statement A shows the build up of the figure er 24,709,453.93 charged to B.M. A. and it would appear from the Auditor's report that a further sum of £732,641.37 has been chargod to il,".r. for rent, making a total charge of $2,442,305.30. Against this an unspecified proportion of the recovery of 21,423,058.31, will apparently be credited to H.H.O.

2. The question arises thether the method of churge to 3.k... 16 correct or whether it would be more appropriate ta cherge B... the coct or operating the company as a public utility, pine rent ad ilead Office expenses. According to Exchequer and Audit Department's notes the cost of fuel consumed, charged in the horking Account (enclosure B), was arrived at ab follows:-

3.1.4. supplies Company's stocks

15961 tons 100 tons

Bubuidy on coul 1 Apr - 14 Jun 1946

8.

1,631,284.12

10,000.00 503.797.50

2,145,091.62

3. It hardly seema appropriats to charge the Bubsidy for the period April - June to the cost of operation to 31 March an. the true cost of operation would therefore appear to be 8783,342.51. To this must be added rent (8732,841.37) and Head Office expenses (7,008.47) making a total of A1,523,192.35, instead of 42,442,305.30.

It is thought B. X. A. might also be expected to bear the subsidy for the month of April 1946 so long as the gross selling price was credited to ĥ.4.A. account. Exchequer and Audit Department have no detailed figures for the China Light and Power Company but the position is no doubt similar.

4. It would be appreciated if the Governor of Hong Kong could be asked for his comments on this question and his proposals for apportioning the recoveries for stocks taken over.

B.

There is one more point which ought to be mentioned. the Deposits at 30 April 1946 there is an item of 180,8:1.32 for 10% accrued pay, referred to in pare.17 of the Accountant General's report on the accounts. Since this mount wes not paid within the D... period it should perhaps be credited to il. 4.0.

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